How to put the

SiriusDecisions Demand
Waterfall into action using
®

marketing automation

Formalize marketing
with a proven
framework
Whether your company refers to it as the sales
waterfall or something else, many organizations
struggle to get a firm grip on all the activities taking
place in moving prospective buyers from awareness
to consideration, selection and finally purchase. It’s
no wonder marketing and sales continually argue
about the quality and handling of leads. And it’s no
surprise that marketing leaders find it challenging
to show the return on their activities and how they
achieved those results.
2
To address this vexing problem, more organizations
are looking for ways to formalize their processes
around lead flow, management, and measurement
with the goal of demonstrating marketing’s impact
on pipeline and revenue. One popular framework is
the SiriusDecisions Demand Waterfall® developed by
SiriusDecisions.
First, let’s summarize the SiriusDecisions Demand
Waterfall® framework as defined by SiriusDecisions.
Then, we’ll show you how to put it into action using
marketing automation software.

How a formal
framework
improves processes
The SiriusDecisions Demand Waterfall® covers the
high-level processes around the following five lead
stages:
• Inquiry
• Marketing qualification
• Sales acceptance
• Sales qualification
• Close
By looking at the process with key stages in mind,
marketing and sales can more easily measure actual
and required lead volume and conversion rates,
determine who is responsible for which activities,
and work hand in hand toward a common goal.
Let’s just consider the handoff of leads from
marketing to sales. This tends to be one of the
biggest sore spots between the two groups, with
sales contending that marketing doesn’t deliver
quality leads—or enough of them—and marketing
3
claiming that sales lets many good leads languish.
By looking at lead management in the context of an
overall framework and process, sales and marketing
can stop focusing on their silos of responsibility
and instead consider all the activities that go into
shepherding a lead from the start line to the finish
line. With a common view into these activities, sales
and marketing can agree on the ideal workflow
for lead handoff and the activities each group will
undertake to make the overall process work.
A formal framework makes it easier to track and
measure those activities—and the related impacts
—throughout the sales waterfall, both at the high
level and more granularly. For instance, marketing
managers can focus on how well marketing is
handing off marketing-qualified leads (MQLs)
to sales, while the sales manager can more easily
analyze how well the sales team is taking care of its
tasks. In both cases, this level of measurement makes
it possible to tweak plans and activities as needed to
achieve better results. And at the end of the day, the
CMO can more easily show the value of marketing’s
contribution to the top line.
 4

Translation to
traditional process
mapping
Prospect
Express Interest

Marketing
Inbound /
Outbound Inquiry

Evaluate Inquiry

Tele
Evaluate AQL TAL Qualify TAL

Develop TGL TGL TQL

Evaluation TQL, TGL, AQL

SAL

Develop SGL Qualify SAL, SGL

Sales SQL

Close Opportunity

© 2015 SiriusDecisions. All Rights Reserved

 5

Aligning
around
leads
One of the basic elements of success when it Marketing Qualified Lead (MQL):
comes to sales and marketing alignment is a shared How marketing determines whether an inquiry
definition of a lead (based on a profile of the ideal satisfies the criteria that marketing and sales agreed
customer) and how leads are treated at each stage of on when defining a lead. This includes how and when
the waterfall. First some basic definitions of the five to pass the lead on to sales, when it should be further
major lead stages and examples of how to handle nurtured before sending to sales, and when it should
each stage with marketing automation. be deleted from the marketing database. At a high
level, an MQL is someone who could benefit by using
Inquiry:
the organization’s product or service and fits your
When a prospect expresses interest in what the
company’s definition of the ideal customer. Today
organization is selling (note this person is not yet a
marketing qualifies leads at this stage by scoring
lead; this is a pre-MQL—Marketing Qualified Lead).
them in a marketing automation system based on
In your marketing automation system, you will likely
the prospect’s activities (such as visiting the website,
enter this name into a general nurture stream with
downloading content, and attending an event) and
the goal of finding out more about the person’s
declared interest in a product or service.
interests and needs.

A raw response or hand-raiser; relatively little

Inquiries is known about the prospect at this point.

A unique inquiry to an inbound or outbound

Marketing Qualified Leads marketing program; relatively little is known
about the prospect at this point.

A lead that has been formally accepted by

Sales Accepted Leads the receiving function, which is compelled
to work the lead in a given timeframe.

A lead that has evolved into an opportunity

Sales Qualified Leads —complete with estimated dollar value and
time frame to close.

Closed/Won An opportunity that has come to fruition.

Business

© 2015 SiriusDecisions. All Rights Reserved

 6

Aligning around leads

SiriusDecisions recognizes the importance of
marketing automation lead scoring by introducing
the term Automation Qualified Lead (AQL) in their
re-architected waterfall (see figure). More advanced
users of marketing automation may want to refer
to SiriusDecisions reports for this re-architected
waterfall.
Sales Accepted Lead (SAL):
These are leads that the sales group initially accepts
because they meet a set of predetermined criteria.
In essence, this is sales’ process for validating that
the marketing team truly qualified the lead per the
agreed-upon criteria.
Sales Qualified Lead (SQL):
This is where the waterfall narrows as sales
determines which MQLs to prioritize as oppor-
tunities. This determination can be based on
numerous criteria, such as time frame for purchase,
budget, and what role the lead plays in making
the purchase decision. Sales may also decide the
lead needs to be sent back to marketing for further
nurturing because the contact may be a good fit
and display interest in the company’s offerings but
might not yet be ready to buy.
Close:
At this stage, the sales team hopefully can close (or
win) the deal.

• Job title • Company size

Demographic • Department • Industry

• City • Region
Geographic • State • Urban/rural
• Country

• Visit website • Download content • Customer status

Behavior • Visit product page • Watch video • Search high
• Attend webinar • Social sentiment value keywords

 
 7

Marketing automation
prepares leads for
hand-off

Microsoft Dynamics Marketing tracks the

behaviors and interactions of each lead and
scores them based on the applicable scoring
model. The score chart, as demonstrated above,
enables marketers and salespeople to track the
progress of a lead as it travels from inquiry to MQL.
 8

How to set up a lead

scoring model using
Dynamics Marketing
Now that we’ve walked through the key lead stages conditions defined by a marketer, and the associated
and the importance of scoring leads, here’s how to actions. Say the condition is a campaign and if a lead
take advantage of Microsoft Dynamics Marketing to entered into that campaign opened a campaign
efficiently and effectively handle the process. email (i.e., took an action), a certain number of points
would be assigned to the lead score. While that is
In Dynamics Marketing, you can set up a lead scoring
a simple campaign example, marketers can set up
model that helps you automatically progress leads
sophisticated rules around the conditions and actions
when they meet your criteria. For example, you could
in their scoring model. They can even assign different
configure Dynamics Marketing to forward leads to
rules to different campaigns.
sales once they reach a score of 100.
Suppose one campaign is focused on promoting
The first step is determining the score you’ll associate
a standard product. Someone who opens an email
with various actions taken by a lead. At a high level,
associated with this campaign could be assigned
your model could indicate that if a prospect takes
5 points. On the other hand, a lead that opens an
a certain action—such as responding to an email,
email associated with a priority campaign could be
filling out a web form, or downloading a white
assigned 10 points. Or perhaps an IT manager who
paper—the score increases by 5 points. If, on the
responds to the high-priority campaign would be
other hand, a prospect doesn’t take any actions for a
assigned 5 points, while a c-level exec who responds
certain amount of time—say two months—you could
would be assigned 10 points, and a competitor
configure Dynamics Marketing so the score decreases
who responds would be given negative points
by 4 points.
(e.g., -10 points). In the next eBook, we explain the
Your model can also be based on fairly sophisticated different lead nurturing campaigns you can create
rules. In the screenshot below, we see sample and manage in Dynamics Marketing to move leads
through the waterfall.

How to set up a lead scoring model
using Dynamics Marketing
Microsoft Dynamics Marketing automates the
SLA with Sales using a lead scoring model such
as this one. This model identifies leads living in
the American Southwest (their “Region 3”) with a
master’s degree or higher who have also engaged
with a recent campaign by interacting with marketing
emails, submitting a landing-page form or, even
9
better, attended the annual sales event. It gives extra
points for visiting product pages on the company
web site, but subtracts points for visiting the jobs
listings. When the lead reaches a score that qualifies
it for a sales-ready grade, it is considered an MQL and
will be synchronized with CRM to await acceptance.
In the past, marketing may have
sent the same email message to
all prospective buyers and labeled
anyone who responded a lead.
Using lead scoring in marketing
automation, marketing can

set up
sophisticated
rules
that take into account a lead’s
profile and where that person is
in the waterfall.
 11

SLAs:
contracts for a
smooth process
When sales and marketing are agreeing on
all the activities that make up the processes
throughout the sales waterfall—or SiriusDecisions
Demand Waterfall®—they also need to agree
on responsibilities. And then they need to follow
through on all the steps involved in moving a lead
through the waterfall. That’s where SLAs come into
play.
Let’s consider the example of marketing evaluating
an inquiry to determine if it should be passed on to
sales. The SLA for this activity could indicate that a
lead will only be forwarded to sales once it reaches
a lead score threshold of 120 or more. If marketing
forwards leads with a score lower than 120, it has
violated the SLA.
Or perhaps an inside sales rep needs to determine if
an MQL should be deemed an SAL. The SLA for this
activity could give the sales rep one hour from receipt
of the MQL to confirm the lead has a name, phone
number or email address, and has indicated interest
in a specific product. Another option is that the SLA
would give the sales rep one hour from receipt of
the MQL to check BANT criteria—that is, budget,
authority, need, and timeline. If sales does not qualify
the lead within this one-hour time frame, it would be
in violation of the SLA. If the sales team accepts the
lead but the lead does not progress within 3 days of
qualification, the SLA could dictate that the lead is
automatically entered into a nurture stream.
Ideally you’ll use systems such as marketing
automation and CRM to help track and enforce
these SLAs.

Problems you’ll face without SLAs

Key gaps: Resulting in:

An agreed-upon Lead waste

lead definition

Inefficient load
Clear role definitions
balancing

Effective escalation One or more major

processes process gaps

Formal training
Lack of adoption
and onboarding

Enforced compliance Static, ineffective SLAs

 12

How to implement
the SiriusDecisions
Demand Waterfall
®

Best Practices Microsoft Dynamics Marketing

General Terminology Terminology, Features, and Implementation

Inquiry Dynamics Marketing Contact:

• Synchronized with CRM but not yet a lead

Automation Dynamics Marketing Lead:

• Often auto-created in response to a landing-form submission (inbound or outbound)
Qualified Lead • Inbound leads can be set to double opt-in, thereby confirming that each lead
(AQL) includes valid email address and represents genuine customer interest
• Lead-assignment rules set up the new lead, assign territory and set status values
• Each lead can represent a single contact or a company with multiple contacts
• Each lead is assigned a scoring model and begins getting scored based on behaviors,
demographics and interactions

Marketing Dynamics Marketing Lead that has reached the sales-ready scoring threshold:
• The lead scoring model implements the marketing SLA
Qualified
• The lead is now synced to CRM, awaiting acceptance
Lead (MQL) • The lead is still available in Dynamics Marketing for further pipeline acceleration
during the sales process

Sales A CRM user has accepted the lead and begins working on it; he or she might
add the lead to rapid-entry campaigns:
Accepted • Sales may reject the lead and either discard it or return it to Dynamics Marketing
Lead (SAL) for more nurturing
• Leads left to languish will eventually violate the sales SLA and may return to
Dynamics Marketing by default
• Salespeople can use the Dynamics Marketing Seller Portal to follow all marketing
communications and add/remove contacts to/from specific campaigns

Sales A CRM user promotes the lead to an opportunity, which is then synced back to
Dynamics Marketing:
Qualified • New opportunities could be drafted into automatic pipeline acceleration campaigns
Lead (SQL) • Sales might instead request a specific pipeline acceleration campaign based on
knowledge of the contact

Close The lead would have been converted to an opportunity that is then closed.
End-to-end demand-waterfall data makes return on marketing investment calculations
and other analyses possible.

Tracking and
measuring
results
Here are a few basics to keep in mind as relates to
aligning marketing and sales.
Value of Alignment
By ensuring marketing and sales are aligned across
waterfall processes, the organization can better
measure performance at a granular level (i.e., at each
handoff stage). This level of measurement helps
pinpoint areas needing improvement. For example,
if sales needs more SQLs, marketing has two options:
increase the number of marketing qualified leads
or increase the conversion rate of MQLs to SALs.
The latter may be more cost-effective than simply
pumping more inquiries and MQLs into the waterfall.
13
Process-specific Metrics
Organizations can use metrics to measure the
effectiveness and efficiency of the waterfall as a
throughput process. These metrics include the:
• Volume of leads and opportunities flowing
through the waterfall
• Conversion rates across the various stages
• Velocity with which leads and opportunities
are progressing
• Deal size distribution
These metrics are valuable in then determining what
marketing and sales needs to do going forward to
improve performance or simply achieve their goals.
 14

Tracking and measuring results

Microsoft Power BI delivers out-of-the-box
customizable role-based dashboards for Microsoft
Dynamics Marketing users.

Achieving revenue
goals using Dynamics
Marketing
In Microsoft Dynamics Marketing and Microsoft
Power BI, you create a dashboard with all process-
specific metrics to measure the effectiveness
and efficiency of the waterfall as a throughput
process. This gives sales and marketing a view into
performance against the entire SiriusDecisions
Demand Waterfall®.
15
A reverse waterfall gives marketing a framework for
calculating the number of leads it needs to deliver to
sales based on the amount of marketing’s revenue
contribution. By taking into account conversion rate
at each lead stage—and even amount of time spent
at each stage—marketing can determine the num-
ber of inquiries it must generate over a certain time
period. In other words, by analyzing metrics associ-
ated with leads as they move through the waterfall,
marketing can build a predictive model for calculat-
ing the number of leads needed to achieve a certain
revenue or customer goal.
 16

Putting the
waterfall
into play
Once marketing and sales agree on the process
required to move prospects from inquiry to a closed
deal—and define the ideal customer, lead handoff,
and SLAs—it’s time to develop strategies and tactics
to drive demand.
So don’t delay—get started setting up, executing,
measuring the impact of your campaigns—and
improving results over time.
Reach out to
learn more.

www.microsoft.com/dynamics

Talk to a Microsoft representative

(United States and Canada).
Availability and hours of operation:
Monday–Friday, 8:00 A.M.–5:30 P.M.
Central Time (UTC-6) in the United
States and Canada.
1-888-477-7989